Most business owners know that errors and omissions insurance, which is a lot like malpractice insurance, protects your company financially if a client sues you for negligence. What they want to find out is how much errors and omissions insurance cost.
Cost will vary per carrier, so it always pays to shop around. An average annual premium likely runs about $700 to $900 a year.
What Affects the Price of E&O Insurance?
Several factors could change the premium price, however. Underwriters will consider a number of risk factors before writing a policy. The factors might include:
Your location: Just like living expenses, insurance expenses are often based on a location’s cost of living. If your business is California based, your premium may cost more than if you were located in the Midwest.
Your size: Insurers will consider both the number of workers you employ as well as your overall value. Both will factor into your overall cost.
Your business: The likelihood of a lawsuit is another determiner. If you work in healthcare, for example, your chance of being sued is higher than that of an accountancy.
Many other factors help determine the overall errors and omissions insurance cost. Working with a skilled agent will help you get a better sense of what that price will be, as well as where you might be able to save.